Building back: Consolidated Bakeries to reorganise and become more agile

Consolidated Bakeries, the producer of the Purity and Ms Birdie brands of baked products, reported that its losses over the first six months of its current financial year — January to June — deepened, but Anthony Chang, the company’s executive chairman, said the changes made to the organisation in the last few months should see it having a brighter future.

Losses at Consolidated Bakeries over the first six months of this year reached JM$13.4 million compared to JM$4.4 million in losses recorded over the same period last year.

Executive chairman of Consolidated Bakeries Anthony Chang
(Photo: Jamaica Observer)

Chang, however, explained that the bottom line was impacted by reorganisation the company has been undergoing. Consolidated Bakeries spent JM$21 million during the period on its reorganisation to make the company more agile after taking a hit from the fallout from the novel coronavirus pandemic.

A new direction

“Last year we were impacted by the fallout in the tourism business. We had grown the business a lot in the tourism sector. We were going into 2020 on a positive note, growing the business in the first two months, January and February, by 15 per cent year over year,” he noted before pointing out that the momentum was snapped by the pandemic.

The executive chairman further stated that the reality forced him to redirect business from the “north shore” into the centre of the country as part of the overall reorganising of the company to “build back to the future”. He outlined that the company underwent a strategic review that was threefold — how the company presents its brands was strategically review, the distribution channels were improved and the company was reorganised “to fit what we do”.

Purity raisin bread is a product of Consolidated Bakeries

“Out of last year, the experiences we learnt taught us we had to do something different, so from last year we have been reorganising the business and that explains some of the extra cost we bear in the quarter and most of that came from how we reorganise our cost, talent cost, HR cost, etc”.

The redirection helped to cauterise a fallout in the sales figures, with the company’s revenues dipping 1.31 per cent to JM$241.4 million. Chang was, however, upbeat that some of the changes made last year are already bearing fruit.

“If you take out the seasonal items, and one of our categories, the biscuit category, sales actually grew by nine per cent, our core manufacturing products grew by nine per cent”, he added.

The seasonal items to which he refers are Easter buns. In 2020, Easter fell in the second quarter of the company’s financial year — the period from April to June. This year it was in the first quarter — the period which began in January and ended in March.

Consolidated Bakeries revenue in the first quarter of 2021, from January to March, increased by 20 per cent on account of an early Easter season and the sale of Easter buns. (File photo)

Chang added that for “the first quarter our Easter bun sales grew and we actually recovered to 2019 levels and our exports in the quarter grow 20 per cent”. As for the biscuit category, he said, “we had some challenges with it due to supplies and distribution and we reorganising to get it back up”.

He didn’t provide additional details about the reorganisation of the biscuit category “for competitive reasons”, but added generally that “we have some categories which are performing to expectations and some which are not, which we need to move up a little faster through reorganisation through branding, packaging, taste, distribution and so on”.

A defiant Chang was not too perturbed about the losses over the last two years, adding “we generate the funds and we put it back into the business because we want to build the business stronger, so we not necessarily say we want to have huge significant profits, but we want to ensure we have a robust company for the future…We are going to take a hit in our expenses and we are going to take some hits in our profit, but we again, we building back to the future.”

“Out of last year, the experiences we learnt taught us we had to do something different, so from last year we have been reorganising the business and that explains some of the extra cost we bear in the quarter…”

Digging deeper

He said while he didn’t want to give forecasts, he’s “expecting to see some improvements in the next six to seven months.”

Chang said the company is getting more data-driven and granular in analysing how it operates from the factory floor to distribution points. Stephen Mullings, head of information technology, Consolidated Bakeries, gave additional details.

“Right now we are tracking the sales per truck, so therefore we can know exactly how long a truck stays at a particular stop and then the sales manager will be able to reorganise the route to get better efficiency because we know that fresh sells. We want the sales rep to be at the store as early as they possible can, so that’s one of the things we are doing now. We also want to increase the amount of stops per day, so basically if a sales rep used to go to 40 shops per day we want to increase it to 50 per day to try to maximise sale.”

The company said its “digging a little deeper to get out more.”

Consolidated Bakeries has also moved more into social media and hiring “influencers” to help push its brands.

Russanette Dennis, marketing officer, Consolidated Bakeries, said the strategy is aimed at “refocusing and rearranging to claw back sales” which fell in 2020.

“We want to build our brand and our awareness. We did some branding and so far the feedback has been good, because some people know Ms Birdie but do not know Purity so we have to push both. We have an ad coming out soon to help in that push,” she added.

Chang admits that the seven-day lockdown the country is now facing — the second of which will begin this weekend from Sunday to Tuesday — will affect distribution. But he said steps the company has taken in the last few months should help it to weather the storm.

“What we have been doing will help this position,” he said before noting, “the shopping behaviour is also changing, how people shop is also adjusting so we have to adjust to them. So people shop sometimes in smaller amounts more frequently in certain communities and they go to different shops, we want to meet the shoppers where they shop.”